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Apple must pay out at least $32.5 million in refunds to settle a lawsuit brought by the US Federal Trade Commission over in-app purchases, the two parties have announced. Apple's CEO, Tim Cook, states in a memo to workers that while it "doesn't feel right for the FTC to sue over a case that had already been settled" -- something he calls "double jeopardy" -- the "consent decree the FTC proposed does not require us to do anything we weren't already going to do, so we decided to accept it rather than take on a long and distracting legal fight."

A number of parents have complained, through lawsuits or otherwise, that the App Store made it too easy for their children to buy in-app content without permission. For some time, the App Store allowed password-free purchases within a 15-minute window of an original purchase. This created a scenario in which a parent might download an app for their child, walk away, and later owe hundreds or thousands of dollars. The situation was compounded by some game developers knowingly deceiving kids about whether or not items would cost real-world currency or just virtual points.

The Cook memo says that Apple has received 37,000 claims of illegitimate purchases, and is in the process of refunding cash. Under the terms of the settlement, Apple must close App Store loopholes by March 31st, and pay the $32.5 million in refunds within a year. The company could owe more depending on the complaints received.

Yeap, in-app purchasing is getting tricky these days. You don't know if it's virtual coins or real money it's deducting and kids don't know any better. First app always requires password but some in-app purchases do not. Happening a few times to my kid but luckily it was an Apple Gift Card that I refilled on needed bases in order to put a cap on his purchases. This is a sticky situation from Apple to monitor when the deduction is hidden inside the app.